Segmentation,Targeting and Positioning (STP) in Marketing is one of those early marketing topics. Once you have figured out what your market offering (product) provides as “value” to your prospective customers- you need to start figuring out your market segmentation, targeting and positioning(STP). Here is a way to think about STP vs. the Google AdWords Account Structure:
[Note: This post was originally posted on May 7, 2015 and is updated on February 24, 2021 due to the great interest of our dear readers. An additional section on “Funny Competitors” is added to cheer up our readers as we come out of the pandemic!]
Segmentation,Targeting,Positioning (STP) faces the market of the business
In marketing,Segmentation, Targeting and Positioning (STP) is all about a market/customer facing perspective. The business is looking outward and wondering what segments of customers might buy their product. The segments can be defined by income,gender, occasion ( eg. mother’s day coming up on May 9, 2021),location,industry (for B2B products), etc. After market segmentation businesses need to decide a portion of the segment where all marketing energy will be focussed. These are called target markets.
Market Segments have the following characteristics and since Target Markets are within segments they must have these characteristics as well:
- Must be identifiable– i.e. answer some questions like where located, what possible age,income gender etc. This is also known as “Buyer Persona” – or what does your buyer look like? We find that businesses remain diffuse and fuzzy on this. The main reason seems to be FOMO (Fear of Missing Out) on a bigger market. But that is a disastrous approach. Our suggestion: narrowly focus and start somewhere.
- Must be substantial– there needs to be some volume of sales expected. The initial target market must be capable of producing revenues and margins to keep the business profitable. Here the higher group (segment) must have a large market size. Why? because once you establish value and product market fit with the target market you have the option of scaling your business,raising investor funds etc.
- Must be reachable online – you have reason to believe that at least some of your target market can be reached online. If anyone is not on the Internet then you can’t advertise via Google AdWords. This is less of an issue in 2021 as after Coronavirus you can expect more of your target market to to be online.
Positioning is about how your customer sees your product compared to other competition. It’s critical to understand positioning because today ( in 2021) you can be sure that a customer considering buying your product will do her due diligence or research. Just typing “competitors of Brand A” on Google will throw up a bunch of ads from Brand B, C, D… to Z and more. For positioning thinking Brand A needs to be very clear of how they are different and more valuable for the target market. [ Note: Dear readers, don’t let competitor ads scare you. Read the new “funny competitors” section later in this post on how to think about competitor brands advertising against your brand. We call this Digital Brand Piracy.]
Google AdWords Structure viz. Campaigns,AdGroups,Ads and Keywords face the business website
The purpose of Google AdWords advertising is to drive more visitors to your website and convert them into customers. Here is how to think about the Google AdWords Account structure in STP terms from the point of view of the customer (Customer Journey) as they come to your website. This is how the Google campaign structure maps to your STP:
- Keywords trigger ads. Whatever your customer searches on Google triggers related ads.Choosing keywords that your target market might search is the trick here. The better your understanding of your target market the better keywords and key phrases you can choose. An easy way to gain insights about what your target market thinks is to simply go to forums/discussion boards. If you are marketing a product say to salons and spas simply search for “salons and spas owners forums” and you’ll be amazed at the number of keyword ideas you can get. The Keyword Planner tool on the Google Ads platform is also very useful.
- Ads is what people see: People see ads and when it resonates with their search intent, they click on the ad. It is here that you must bring parts of your positioning into play. Say what’s special about you- that’s different from your competitor.Every Ad can have a landing page that takes the visitor to a particular web page on your website. In general it is good to have AdGroups that each have the same landing page particularly when you have hundreds of Ads running.
- Landing Page: This is where the web visitor arrives at your website, after clicking on your ad. Your effort to meet customer expectations on the landing page is critical to advertising results.
- AdGroups: AdGroups contain Ads around a particular theme and keywords. Keywords are common within an AdGroup. A good idea is not to duplicate keywords between different AdGroups as you would then be competing in the Google auction with yourself, by bidding for the same keywords in different AdGroups. AdGroups are trying to build your market positioning and engage and convert customers who believe in your positioning.
- Campaigns: Campaigns correspond to target markets in STP and you can have all kinds of settings here like location ( like searches within 100 miles of New York City), daily budget etc. If you have display campaigns (banners) going on, you can do other settings like demographic,in-market etc.
The simple idea that STP is outward and market facing while the Google AdWords account structure is inward focused that implements your STP – is a good start.
Funny Competitors: You will find that competitors bid on your Brand keywords and spend a lot trying to convince someone who typed your brand on the Google search bar to come and check out their website. Yes this is serious because if a customer typed your brand name it means that the customer was seriously thinking about your brand. However, the funny part is that in most such ads the competing brand is thinking like an aggressive salesperson (standing outside in the market and yelling “come to our store” ) and not like a thoughtful marketer in 2021. The customer will do more research for high value items. For low value items the customer might switch and it all depends on your value and positioning with respect to your competitor.
Another form of Digital Brand Piracy is that competitors emerge who are unrelated to your industry and who are just trying to make a buck. An example of this scam involves YouTube. A YouTuber looks for ads of products and knows which brands are advertising. Now in two minutes , with a cell phone the YouTuber puts out a thoughtless “review” with the brand name in the title and keywords of the so called “review” video. The next time someone searches for your Brand on YouTube this review pops up on the first page because the title matches your brand name! The YouTuber builds views on their YouTube Channel and makes some money on the back of your advertising dollar. There are variations of this scam and we guess it has much to do with how your Ad Campaigns are structured and managed.